Khalid bin Mahfouz
Encyclopedia
Khalid bin Mahfouz was a wealthy Saudi Arabian businessman residing in Ireland
. He was accused of supporting al-Qaeda
.
As of 2002, he was believed to be confined in a hospital in Taif by Saudi authorities. He died on August 16, 2009 of a heart attack.
of Saudi Arabia (NCB). Salim Ahmed then became the personal banker of the Saudi royal family. He handed management of NCB, the largest bank in the country, to Khalid sometime in the 1980s.
In the 1970s Khalid bin Mahfouz bought and lived in a $3.5 million chateaux-style house, later named "Versailles," in the River Oaks area of Houston. He also bought a four thousand acre (16 km²) ranch along the Trinity River
in Liberty County, Texas
, near the ranch of James Bath. Bath said that Khalid bin Mahfouz "was a banker first and always acted as a banker should. He was extremely intelligent and quick to assess things."
In 1990 Khalid bin Mahfouz acquired Irish
citizenship through inward-investment procedures.
Bin Mahfouz was married with three children. His personal net worth
was $3.2 billion in 2006, making him one of the richest people in the world; his family fortune is worth over $4 billion. He has been involved in various business and charitable organizations throughout his life.
, a financial conglomerate later convicted of money laundering
, bribery
, support of terrorism
, arms trafficking, and many other crimes. Mahfouz personally owned a 20% stake in BCCI. He was indicted by a New York state grand jury
for fraud
but denied any culpability. The fraud charges were settled for $225 million in lieu of fines. Mr. bin Mahfouz has claimed that he simply settled as a business decision rather than using resources to fight further.
's book House of Bush, House of Saud claims that bin Mahfouz donated over $270,000 to Osama bin Laden's Islamist organization at the request of Osama's brother Salem bin Laden
. Bin Mahfouz's lawyer stated: "This donation was to assist the US-sponsored resistance to the Soviet occupation of Afghanistan
and was never intended nor, to the best of Sheikh Khalid's knowledge, ever used to fund any 'extension' of that resistance movement in other countries."
testimony in 1998, Central Intelligence Agency
Director James Woolsey stated (wrongly, and later retracted) that bin Mahfouz's sister is a wife of Osama bin Laden
, making the two brothers-in-law. Bin Mahfouz has consistently denied this. Many publications, including The Wall Street Journal
, the Los Angeles Times
, Fortune
, the Washington Post, and USA Today
, reported that the two were brothers-in-law. Each publication has since issued a retraction, sometimes after lengthy litigation.
In the libel trial against him, Woolsey testified that bin Mahfouz had been misidentified. Woolsey later stated, "I don't know what to say other than there was some confusion, but I never meant to refer to Bin Mahfouz's sister."
group. According to reports, high-placed Saudi businessmen transferred millions of dollars through NCB to charities operating as fronts for al-Qaeda. Mahfouz states that he could not have been aware of every wire transfer moving through the bank, and that he would not have allowed such transactions had he known they were taking place. There is no evidence that Mahfouz was personally involved in any of these transactions.
Additionally, Forbes reports:
NCB senior officials vehemently deny the existence of this audit.
He eventually won a string of lawsuits against writers who had accused him of supporting terrorism as no legitimate connection could be found. Rachel Ehrenfield, the author of Funding Evil
and a U.S. citizen based in New York, had not written or marketed her book internationally and refused to acknowledge the jurisdiction of the British court over her case. Her refusal resulted in the British Court awarding a default judgment against her in 2005. Dr Ehrenfield was ordered to apologize, destroy all copies of her book and pay him $230,000 in damages. The New York State Legislature, however, passed a law preventing the judgments from being enforced by providing greater protection against libel judgments in countries whose laws are inconsistent with the freedom of speech granted by the United States Constitution .
Sheik Mahfouz did acknowledge making one contribution to Al Qaeda during the epoch of the Soviet occupation of Afghanistan. During this era Osama bin Laden and al Qaeda were also being directly financed by the US government.
organization called the Muwafaq Foundation, Muwafaq being Arabic for "blessed relief". He funded this charity with $30 million, and put his eldest son, Abdulrahman bin Mahfouz, on the board of directors. In October 2001, the U.S. Treasury Department
named Muwafaq Foundation - a charity devoted to famine relief - a front organization
. Neither Khalid nor Abdulrahman were accused of funding terrorism by the United States; however Yasin al-Qadi
, a Saudi national hired to run the charity, was named a supporter of terrorism by and had his assets frozen by the U.S. Treasury Department.
Bin Mahfouz cleared his name from accusations he was funding terrorism through the Blessed Relief charity of the Muwafaq Foundation, an organization devoted to famine relief.
. The controversy springs from a report prepared by French investigator Jean-Charles Brisard
and his research agency, the JCB Consulting Group, for the President of the Security Council
of the United Nations
in December 2002. In this report Khalid was listed as one of seven "main individual Saudi sponsors of al Qaeda." JCB Consulting claimed that the report was issued at the request of the UN, but Alfonso Valdivieso Sarmiento
, then president of the UN Security Council, denied commissioning the report in a letter sent to representatives of Mahfouz. Valdivieso went on to state that the report was unsolicited and that "Mr Brisard's conduct and attitude is totally deceitful and marked by the intention to mislead." JCB Consulting is a paid investigator for a group of 9/11 victims who are suing hundreds of defendants, including Khalid bin Mahfouz, for allegedly financing al Qaeda. In 2001 Brisard and another investigator, Guillaume Dasquié
(former editor-in-chief of Intelligence Online
) published in 2001 a French book entitled "Ben Laden: La vérité interdite" (Forbidden Truth) (ISBN 2-07-042377-8). In November 2006 they retracted their findings and issued an unreserved apology to Khalid bin Mahfouz and his son Abdulrahman, undertaking never to repeat their allegations.
Republic of Ireland
Ireland , described as the Republic of Ireland , is a sovereign state in Europe occupying approximately five-sixths of the island of the same name. Its capital is Dublin. Ireland, which had a population of 4.58 million in 2011, is a constitutional republic governed as a parliamentary democracy,...
. He was accused of supporting al-Qaeda
Al-Qaeda
Al-Qaeda is a global broad-based militant Islamist terrorist organization founded by Osama bin Laden sometime between August 1988 and late 1989. It operates as a network comprising both a multinational, stateless army and a radical Sunni Muslim movement calling for global Jihad...
.
As of 2002, he was believed to be confined in a hospital in Taif by Saudi authorities. He died on August 16, 2009 of a heart attack.
Biography
Khalid bin Mahfouz was the second eldest son of Salim Ahmed bin Mahfouz a Saudi who rose from being an illiterate moneychanger to the founder of the first bank in his country, the National Commercial BankNational Commercial Bank
The National Commercial Bank also known as AlAhli Bank is the first Saudi Arabian bank, the largest bank by asset in the Arab world and one of the pioneers in Islamic Banking and finance in the world.- Founding and Legal Structure :...
of Saudi Arabia (NCB). Salim Ahmed then became the personal banker of the Saudi royal family. He handed management of NCB, the largest bank in the country, to Khalid sometime in the 1980s.
In the 1970s Khalid bin Mahfouz bought and lived in a $3.5 million chateaux-style house, later named "Versailles," in the River Oaks area of Houston. He also bought a four thousand acre (16 km²) ranch along the Trinity River
Trinity River (Texas)
The Trinity River is a long river that flows entirely within the U.S. state of Texas. It rises in extreme north Texas, a few miles south of the Red River. The headwaters are separated by the high bluffs on the south side of the Red River....
in Liberty County, Texas
Liberty County, Texas
Liberty County is a county located in Texas within the Houston–Sugar Land–Baytown metropolitan area. As of the 2010 United States Census, the population was 75,643. Its county seat is Liberty.-Geography:According to the U.S...
, near the ranch of James Bath. Bath said that Khalid bin Mahfouz "was a banker first and always acted as a banker should. He was extremely intelligent and quick to assess things."
In 1990 Khalid bin Mahfouz acquired Irish
Republic of Ireland
Ireland , described as the Republic of Ireland , is a sovereign state in Europe occupying approximately five-sixths of the island of the same name. Its capital is Dublin. Ireland, which had a population of 4.58 million in 2011, is a constitutional republic governed as a parliamentary democracy,...
citizenship through inward-investment procedures.
Bin Mahfouz was married with three children. His personal net worth
Net worth
In business, net worth is the total assets minus total outside liabilities of an individual or a company. For a company, this is called shareholders' preference and may be referred to as book value. Net worth is stated as at a particular year in time...
was $3.2 billion in 2006, making him one of the richest people in the world; his family fortune is worth over $4 billion. He has been involved in various business and charitable organizations throughout his life.
$225 million BCCI scandal fine
Bin Mahfouz was a non-executive director of Bank of Credit and Commerce InternationalBank of Credit and Commerce International
The Bank of Credit and Commerce International was a major international bank founded in 1972 by Agha Hasan Abedi, a Pakistani financier. The Bank was registered in Luxembourg with head offices in Karachi and London. Within a decade BCCI touched its peak...
, a financial conglomerate later convicted of money laundering
Money laundering
Money laundering is the process of disguising illegal sources of money so that it looks like it came from legal sources. The methods by which money may be laundered are varied and can range in sophistication. Many regulatory and governmental authorities quote estimates each year for the amount...
, bribery
Bribery
Bribery, a form of corruption, is an act implying money or gift giving that alters the behavior of the recipient. Bribery constitutes a crime and is defined by Black's Law Dictionary as the offering, giving, receiving, or soliciting of any item of value to influence the actions of an official or...
, support of terrorism
Terrorism
Terrorism is the systematic use of terror, especially as a means of coercion. In the international community, however, terrorism has no universally agreed, legally binding, criminal law definition...
, arms trafficking, and many other crimes. Mahfouz personally owned a 20% stake in BCCI. He was indicted by a New York state grand jury
Grand jury
A grand jury is a type of jury that determines whether a criminal indictment will issue. Currently, only the United States retains grand juries, although some other common law jurisdictions formerly employed them, and most other jurisdictions employ some other type of preliminary hearing...
for fraud
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...
but denied any culpability. The fraud charges were settled for $225 million in lieu of fines. Mr. bin Mahfouz has claimed that he simply settled as a business decision rather than using resources to fight further.
Donations to Osama bin Laden in 1988
Craig UngerCraig Unger
Craig Unger is an American journalist and writer. He grew up in Dallas, Texas, and attended Harvard University. His most recent book is The Fall of the House of Bush, about the internal feud in the Bush family and the rise and collusion of the neoconservative and Christian right in Republican party...
's book House of Bush, House of Saud claims that bin Mahfouz donated over $270,000 to Osama bin Laden's Islamist organization at the request of Osama's brother Salem bin Laden
Salem bin Laden
Salem bin Mohammed bin Awad bin Laden was a Saudi Arabian investor and businessman.-Life:Considered the eldest son of Mohammed bin Laden, the founder of Saudi Binladin Group and a half-brother and cousin of the infamous terrorist...
. Bin Mahfouz's lawyer stated: "This donation was to assist the US-sponsored resistance to the Soviet occupation of Afghanistan
Afghanistan
Afghanistan , officially the Islamic Republic of Afghanistan, is a landlocked country located in the centre of Asia, forming South Asia, Central Asia and the Middle East. With a population of about 29 million, it has an area of , making it the 42nd most populous and 41st largest nation in the world...
and was never intended nor, to the best of Sheikh Khalid's knowledge, ever used to fund any 'extension' of that resistance movement in other countries."
Alleged familial relationship with Osama bin Laden
In United States SenateUnited States Senate
The United States Senate is the upper house of the bicameral legislature of the United States, and together with the United States House of Representatives comprises the United States Congress. The composition and powers of the Senate are established in Article One of the U.S. Constitution. Each...
testimony in 1998, Central Intelligence Agency
Central Intelligence Agency
The Central Intelligence Agency is a civilian intelligence agency of the United States government. It is an executive agency and reports directly to the Director of National Intelligence, responsible for providing national security intelligence assessment to senior United States policymakers...
Director James Woolsey stated (wrongly, and later retracted) that bin Mahfouz's sister is a wife of Osama bin Laden
Osama bin Laden
Osama bin Mohammed bin Awad bin Laden was the founder of the militant Islamist organization Al-Qaeda, the jihadist organization responsible for the September 11 attacks on the United States and numerous other mass-casualty attacks against civilian and military targets...
, making the two brothers-in-law. Bin Mahfouz has consistently denied this. Many publications, including The Wall Street Journal
The Wall Street Journal
The Wall Street Journal is an American English-language international daily newspaper. It is published in New York City by Dow Jones & Company, a division of News Corporation, along with the Asian and European editions of the Journal....
, the Los Angeles Times
Los Angeles Times
The Los Angeles Times is a daily newspaper published in Los Angeles, California, since 1881. It was the second-largest metropolitan newspaper in circulation in the United States in 2008 and the fourth most widely distributed newspaper in the country....
, Fortune
Fortune (magazine)
Fortune is a global business magazine published by Time Inc. Founded by Henry Luce in 1930, the publishing business, consisting of Time, Life, Fortune, and Sports Illustrated, grew to become Time Warner. In turn, AOL grew as it acquired Time Warner in 2000 when Time Warner was the world's largest...
, the Washington Post, and USA Today
USA Today
USA Today is a national American daily newspaper published by the Gannett Company. It was founded by Al Neuharth. The newspaper vies with The Wall Street Journal for the position of having the widest circulation of any newspaper in the United States, something it previously held since 2003...
, reported that the two were brothers-in-law. Each publication has since issued a retraction, sometimes after lengthy litigation.
In the libel trial against him, Woolsey testified that bin Mahfouz had been misidentified. Woolsey later stated, "I don't know what to say other than there was some confusion, but I never meant to refer to Bin Mahfouz's sister."
Alleged NCB funding of al-Qaeda
Khalid bin Mahfouz has denied that NCB, his bank, was involved in funding an al-QaedaAl-Qaeda
Al-Qaeda is a global broad-based militant Islamist terrorist organization founded by Osama bin Laden sometime between August 1988 and late 1989. It operates as a network comprising both a multinational, stateless army and a radical Sunni Muslim movement calling for global Jihad...
group. According to reports, high-placed Saudi businessmen transferred millions of dollars through NCB to charities operating as fronts for al-Qaeda. Mahfouz states that he could not have been aware of every wire transfer moving through the bank, and that he would not have allowed such transactions had he known they were taking place. There is no evidence that Mahfouz was personally involved in any of these transactions.
Additionally, Forbes reports:
NCB senior officials vehemently deny the existence of this audit.
He eventually won a string of lawsuits against writers who had accused him of supporting terrorism as no legitimate connection could be found. Rachel Ehrenfield, the author of Funding Evil
Funding Evil
Funding Evil: How Terrorism is Financed and How to Stop It is a book written by counterterrorism researcher Dr. Rachel Ehrenfeld, director of the and the Economic Warfare Institute...
and a U.S. citizen based in New York, had not written or marketed her book internationally and refused to acknowledge the jurisdiction of the British court over her case. Her refusal resulted in the British Court awarding a default judgment against her in 2005. Dr Ehrenfield was ordered to apologize, destroy all copies of her book and pay him $230,000 in damages. The New York State Legislature, however, passed a law preventing the judgments from being enforced by providing greater protection against libel judgments in countries whose laws are inconsistent with the freedom of speech granted by the United States Constitution .
Sheik Mahfouz did acknowledge making one contribution to Al Qaeda during the epoch of the Soviet occupation of Afghanistan. During this era Osama bin Laden and al Qaeda were also being directly financed by the US government.
Muwafaq Foundation
Khalid bin Mahfouz helped set up a charityCharitable organization
A charitable organization is a type of non-profit organization . It differs from other types of NPOs in that it centers on philanthropic goals A charitable organization is a type of non-profit organization (NPO). It differs from other types of NPOs in that it centers on philanthropic goals A...
organization called the Muwafaq Foundation, Muwafaq being Arabic for "blessed relief". He funded this charity with $30 million, and put his eldest son, Abdulrahman bin Mahfouz, on the board of directors. In October 2001, the U.S. Treasury Department
United States Department of the Treasury
The Department of the Treasury is an executive department and the treasury of the United States federal government. It was established by an Act of Congress in 1789 to manage government revenue...
named Muwafaq Foundation - a charity devoted to famine relief - a front organization
Front organization
A front organization is any entity set up by and controlled by another organization, such as intelligence agencies, organized crime groups, banned organizations, religious or political groups, advocacy groups, or corporations...
. Neither Khalid nor Abdulrahman were accused of funding terrorism by the United States; however Yasin al-Qadi
Yasin al-Qadi
Yasin al-Qadi is a citizen of Saudi Arabia who was subjected to economic sanctions because he is suspected of ties to terrorism.The United States Treasury classified Al Qadi as a "Specially Designated Global Terrorist"....
, a Saudi national hired to run the charity, was named a supporter of terrorism by and had his assets frozen by the U.S. Treasury Department.
Bin Mahfouz cleared his name from accusations he was funding terrorism through the Blessed Relief charity of the Muwafaq Foundation, an organization devoted to famine relief.
UN designation
There have been numerous allegations that Khalid bin Mahfouz has been named a terrorist financier by the United NationsUnited Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...
. The controversy springs from a report prepared by French investigator Jean-Charles Brisard
Jean-Charles Brisard
Jean-Charles Brisard is an international expert and consultant on international terrorism. He authored the first and most exhaustive study ever written on the financial network of the Bin Laden organization, "The economic environment of Osama Ben Laden"...
and his research agency, the JCB Consulting Group, for the President of the Security Council
United Nations Security Council
The United Nations Security Council is one of the principal organs of the United Nations and is charged with the maintenance of international peace and security. Its powers, outlined in the United Nations Charter, include the establishment of peacekeeping operations, the establishment of...
of the United Nations
United Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...
in December 2002. In this report Khalid was listed as one of seven "main individual Saudi sponsors of al Qaeda." JCB Consulting claimed that the report was issued at the request of the UN, but Alfonso Valdivieso Sarmiento
Alfonso Valdivieso Sarmiento
Alfonso Valdivieso Sarmiento is a Colombian lawyer and politician who as the 2nd Attorney General of Colombia brought charges and stood against the administration of Ernesto Samper Pizano during the Proceso 8000. He also served as the 24th Permanent Representative of Colombia to the United Nations...
, then president of the UN Security Council, denied commissioning the report in a letter sent to representatives of Mahfouz. Valdivieso went on to state that the report was unsolicited and that "Mr Brisard's conduct and attitude is totally deceitful and marked by the intention to mislead." JCB Consulting is a paid investigator for a group of 9/11 victims who are suing hundreds of defendants, including Khalid bin Mahfouz, for allegedly financing al Qaeda. In 2001 Brisard and another investigator, Guillaume Dasquié
Guillaume Dasquié
Guillaume Dasquié is a French journalist and writer who specialises in matters of intelligence and terrorism.Dasquié graduated in Law in Paris in 1990...
(former editor-in-chief of Intelligence Online
Intelligence Online
Intelligence Online, formerly Intelligence Newsletter, is a specialist publication for the government and corporate intelligence sectors. It has been published fortnightly by the Paris-based news group Indigo Publications since 1980....
) published in 2001 a French book entitled "Ben Laden: La vérité interdite" (Forbidden Truth) (ISBN 2-07-042377-8). In November 2006 they retracted their findings and issued an unreserved apology to Khalid bin Mahfouz and his son Abdulrahman, undertaking never to repeat their allegations.
External links
- New York Times obituary on Mahfouz
- Khalid bin Mahfouz's official site
- The Guardian on Muwafaq
- Libel Tourism: When Freedom of Speech Takes a Holiday
- Wikisource: Cole report into the granting of 11 Irish passports to Khalid bin Mahfouz and his associates